Monday, 22 December 2008

Luxury Markdowns by Stealth - 21/12/08

Whilst it is not uncommon for luxury and premium end brands to go on markdown or sale prior to Christmas, this is usually left to a handful of brands that reduce their autumn/winter season to make way for Cruise or pre-summer collections. Most brands offer VIPs pre-sale opportunities to purchase prior to Christmas or immediately after, with the sale going public end of December/early January. However across the globe there are more brands trying to move inventory in more surreptitious means, private showroom sales, VIPs and "please bring a friend" invitations, a suite in a hotel away from their retail stores... It is all about 'moving current inventory' out, bring the sales in and trying not to reduce the gross margin too much.

There is a sign of some desperation, more particularly seen in markets such as the US and London, with greater markdown activity at more greatly reduced prices. It is concealed desperation, dressed up as value added and loyalty needs to be done and with luxury and premium end brands making these strategic decisions, the reputations have greater chance to remain in tact and their raison d'etre will continue untarnished. It's harder to do something that not do anything at all. These dynamic times call for considered strategic action to ensure continuity of business.

If autumn/winter is not moved through Spring/Summer 09 and Autumn/Winter 09/10 will be sparse offerings indeed. The challenge of seasonality is constant however no more so than now.

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury,